Serco Internal

Northern Ireland Presented by

Gurbux Singh & Martin Eves

16 October 2012

Serco Internal

Who are we? Serco is a global 100 FSTE public services company with 50 percent of business outside of the UK

We work for national and local government across public services in health, education, transport, science and defence

50 years' experience of helping our customers achieve their goals

We run:

Prisons

Railways

Electronic Monitoring

PECS

Immigration

Leisure

Defence

Health

Education

Environmental Services

BPO

Transportation

We work with Governments:

UK

European Union

US

Australia

India

Africa

Serco Internal

Serco Ireland Presence & Capabilities

Integrated Facilities Management including:

Belfast Roads Service

State Street Bank

Pfizer Ireland

Deloitte Ireland

Invest Northern Ireland

Retail

Aldi Ireland – Facilities Management Contract

Boots Retailers – Hard Services Facilities Management

Northern Ireland Civil Service – Cleaning & Catering Services

Northern Ireland Water – Water Quality Sample & Transport

Serco Internal

Welfare Services Overview

Entered in to welfare-to-work market October 2009 through FND

Introduced a new model of delivery with 100% subcontracting

Delivered 25,000 people in a year in to work

Entered Work Programme supporting 45,000 long-term unemployed individuals

Outcome based contract with approximately 40 subcontractors

We also deliver two NOMS and ESF Contracts

Serco Internal

Key Features of Serco Model Service Integrator

Prime / subcontracting

100% supply chain management

Combined strength of 100 FSTE company with expertise of local providers and key stakeholders

Build a network with a wide range of providers including – Voluntary third sector, charitable, private and public organisations

Payments by results, outcomes focused

Front loaded payment method to ensure case flow to the supply chain

Building capabilities and capacities

Open and transparent

Single case management system

Invested in an IT Solution to actively support our supply chain

Three phase delivery model

To enable change and to support our customers

Encouraging competition at local level

Serco Internal

Key Features of Serco Model

Quality Provide assurances to DWP, Risk management methodology, Quality Improvement Framework Evaluating provider processes Project management of all audits Market share shift

Compliance

Protection of the public purse Prevent and detect inaccurate performance Minimise the risk of fraud Integrity of data

Information Security Protection of DWP data Support the network with information security matters Report all breaches to DWP

Serco Internal

Welcome Direction of Travel – DEL NI

Focus on employment outcomes rather than prescribed processes

Target those most in need

Create stronger incentives for helping those participants who are further from work

Ensure that participants get the support they need

Deliver value for money for the taxpayer

Reduce prescription for providers

To build the right market for the future

Serco Internal

Shifting Dynamics of Service Procurement

Steps 2 Success is a procurement that is different to the shape of existing delivery models:

– Milestones are changing;

– Geographies are increasing;

– Diversity of service delivery will be enhanced;

– Innovation will be pivotal to success.

All of this means more pressure on working capital:

– Revenue streams are pushed to the right;

– Investment in solution and delivery methodology is required.

Serco Internal

Moving Towards Payment by Results

As services providers we face new challenges:

– Uncertainty: Payment is based on future performance; Little or no performance history; Future economic activity is unknown.

– Risks: There will be a funding gap; If we don’t perform the gap will widen; How do we know our forecasts are correct?

– Structure: Business might not be set-up for the change; Working capital (and access to it) is critical; How long since we really addressed our overhead?

Serco Internal

10

Payment From Future Milestones – Cashflow Management is Critical

CASHFLOW

0TIME

START FEE

JOB START

SUSTAINMENT

START FEE

INTERVIEWS

TRAINING

TRAVEL

OVERHEADS

MEETINGS

SUPPORT

OVERHEADS

SUPPORT

OVERHEADS

Serco Internal

11

Payment From Future Milestones

CASHFLOW

0TIME

START FEE

JOB START

SUSTAINMENT

INTERVIEWS

TRAINING

TRAVEL

OVERHEADS

MEETINGS

SUPPORT

OVERHEADS

Serco Internal

12

Addressing These Changes

Good News:

– There will be funding albeit a different nature;

– We will have time to deliver;

– Milestone recognition gives us more opportunities to achieve;

– Upfront service fee or engagement fee will help;

– Over achievement will be incremental.

But we MUST:

– Innovate our solution;

– Deliver performance;

– Look at new sources of funding.